Saturday, August 20, 2016

Modesto in talks to restart airport flights, with focus on Los Angeles

Modesto may have landed its best prospect in its effort to restart commercial passenger service at its airport since those flights ended more than two years ago.

City officials confirmed they have been talking with Great Lakes Airlines – a small regional carrier based in Cheyenne, Wyo. – about offering flights, with service to Los Angeles the city’s top choice.

A recent airport commercial service market study conducted for Modesto showed Los Angeles as the top destination for Stanislaus County air travelers, with Phoenix coming in second. Great Lakes flies to both cities.

The airport has not had passenger flights since June 2014, when SkyWest Airlines ended its daily flights between Modesto and San Francisco, citing “poor performance in the market.” The flights were subject to delays and cancellations because of fog and other problems at the San Francisco airport, causing passengers to miss their connecting flights.

City Manager Jim Holgersson stressed that this effort is in its early stages and a lot of work needs to be done. But he speculated flights could start in six months to a year if all the pieces fall into place.

But there are a lot of pieces, and Modesto faces competition from Stockton. The airline industry is dealing with a pilot shortage caused by retirements and recent federal rules that increased training for new pilots and require shorter work hours and more rest time for current pilots. These changes have hit smaller, regional carriers hard.

“Carriers like Great Lakes are on the bottom rung of the airline industry,” said Brent Bowen, dean of the college of aviation at Embry-Riddle Aeronautical University in Prescott, Ariz. “The shortage is so dire.”

Great Lakes has been plagued by canceled flights in the communities it serves and financial challenges, according to news accounts. For instance, Great Lakes reported to the U.S. Securities and Exchange Commission in November that it lost $7.4 million during the first nine months of last year on revenues of $32.8 million. Great Lakes has attributed its problems to the pilot shortage.

Great Lakes CEO Chuck Howell did not return phone calls Thursday and Friday seeking comment.

Modesto Airport Manager Mark Germanowski said the city will do its due diligence. “Before any deal is reached, we would want a solid business plan,” he said. Great Lakes officials have met city and other officials in Modesto to discuss the flights.

The airline flew out of Merced Regional Airport for about seven years. Airport Manager Janet Young said canceled flights were not an issue until the last two or three years, and blamed them on the pilot shortage. Merced replaced Great Lakes with another carrier last year. “The city was very satisfied with their service prior to the issues related to the pilot shortage,” she said.

One bonus for Modesto is that Great Lakes is not asking for a revenue guarantee. Airlines typically ask airports to make up any financial losses they sustain through the guarantee. Those guarantees can be for more than $1 million.

But Great Lakes is asking the city to help it find pilots for the Modesto flights. The city has enlisted the help of Opportunity Stanislaus, formerly called the Stanislaus Business Alliance. Opportunity Stanislaus CEO Dave White said the goal is to find pilots who have retired or are close to retirement and would like a work schedule that allows them to be home for dinner.

White said Great Lakes has used this model of recruiting local pilots elsewhere.

The Stockton Metropolitan Airport also is trying to land Los Angeles flights. And it is touting the 1.2 million residents of San Joaquin and Stanislaus counties as potential customers who could fly out of Stockton rather than the Bay Area or Sacramento. The (Stockton) Record newspaper reported last month that the airport would receive a $650,000 federal grant to help it establish service between Stockton and Los Angeles.

The newspaper reported that the airport would bundle the grant with $350,000 in local funding to have $1 million to offer an airline as a revenue guarantee. The newspaper also reported the grant announcement named SkyWest as the “primary candidate for the new Stockton service.”

Modesto officials said there are enough people in the region to support both airports.

“Modesto has an excellent airport and is in a great position to attract air service,” city spokeswoman Amy Vickery wrote in an email. “And we will continue the effort to re-establish air service because we know the market here would support it.

Modesto residents and those in outlying areas – greater Stanislaus County, foothills residents, etc. – would use the service, connecting to L.A. as well as Phoenix, she said in the email. “The demand is high,” she wrote. “As a matter of fact, one airline we spoke to asserted that if Stockton had their own service, it would not impact us in Modesto. The demand and population between the two counties is enough that service in both cities would be sustainable.”


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